UK business activity quickens in October to highest level since February

what happened

According to TradingView, the preliminary S&P Global composite PMI for the UK climbed to 53.1 in October from 52.0 in September. Analysts had expected 51.7. The reading stayed above the 50 threshold that separates contraction from expansion for a fourth straight month and was the strongest since February.

Output grew faster in both manufacturing and services. Factory activity posted its sharpest rise in just over two years. Employment also returned to growth, though only slightly, ending a two-year run of job reductions as firms responded to stronger demand by hiring again.

Chris Williamson, chief business economist at S&P Global Market Intelligence, described the figures as a hopeful signal for the economy's resilience. He warned that conflicts in the Middle East and Ukraine could still add volatility to energy markets, while living costs, fiscal uncertainty and higher borrowing costs keep weighing on businesses. He also said price pressures remain high, making a Bank of England rate increase at its next meeting nearly certain.

why it matters

For markets, the data strengthen expectations of a Bank of England rate hike and could influence sterling and UK government bonds. The FTSE 100 is sensitive to domestic demand, and the signal that further hikes into 2027 may become more likely keeps interest-rate paths in focus for investors.

market impact

Sterling and gilts: firmer activity and sticky prices support expectations of a tighter BoE policy.

tags

instruments